2 Cheap Stocks to Add to Your TFSA Before They Get Expensive

Consider Restaurant Brands International (TSX:QSR) and another stock for a long-term TFSA fund.

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TFSA (Tax-Free Savings Account) investors shouldn’t let market moves dictate their next investment decision. As long as you’re in it for the long haul, I think it makes sense to average into dividend payers gradually over time.

While stocks may seem a tad toppy to some as we head past the midpoint of February and the first quarter of 2024 (can you believe how fast time flies?), I’d argue there’s still plenty of opportunity out there. You just have to know where to look. In this piece, we’ll check out two intriguing passive-income powerplays that ought to be worth checking out over the coming weeks and months as markets do their thing!

Restaurant Brands International

Restaurant Brands International (TSX:QSR) is a fast-food firm that recently reported some awesome quarterly earnings. However, they clearly failed to impress investors, some of whom were quick to ditch shares, with the stock falling north of 3% on the day. Shares recovered modestly (more than 2%) on the following day, however. Indeed, it seemed like all stocks just had a bad day on Tuesday.

The big headline, I believe, was the strength over at Tim Hortons (one of four cherished brands in the QSR portfolio). The quarterly profit more than doubled at Restaurant Brands, thanks in part to a big lift from the Canadian coffee and donut chain. How’s that for a double-double?

Moving ahead, I continue to view QSR stock as a deep-value income bargain for investors looking to get everything in one go. In many ways, QSR stock is like the Everything bagel. It has dividends, growth, and a solid management team that’s running the show quite nicely.

All considered, the stock’s a great post-earnings buy at around $103 and change per share, with a dividend yield that’s hovering around the 2.8% mark. Hopefully, the strength at Tim Hortons can continue into year’s end. As the brand expands, I’d not be surprised if the chain grows to become even more influential!

Sleep Country Canada

Sleep Country Canada (TSX:ZZZ) is one of the best mattress (and sleep product) retailers in the country. Though there have been a lot of digital disruptors (remember mattress-in-a-box companies like Casper and Leesa?), with a growing number of rivals (think Helix) popping up on the scene by the day, it seems.

Still, Sleep Country remains a top dog in the space as it looks to expand into the easily-deliverable mattress scene. Personally, I think we all need to test out the beds before committing to buying something that could easily cost north of four figures.

Though return policies may be generous, I’d argue that it’s just so inconvenient to have to go through the whole process. In any case, ZZZ stock makes it more efficient for sleepers to discover new mattresses that are perfect just for them. Indeed, shopping at the local Sleep Country can be kind of like Goldilocks trying beds for the perfect one.

After a decent past year of gains, I think ZZZ stock itself is in that Goldilocks position for investors as consumers look to move on from the past few years of sluggishness. Inflation won’t be around forever, nor will macro headwinds. Eventually, Canada’s economy will be in good shape again, and when that happens, look for discretionary purchases to boom again.

The 3.51% dividend yield is the cherry on top of an already fully loaded (but affordable) sundae, with shares trading at 10.88 times trailing price to earnings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has positions in Restaurant Brands International. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

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